Cross-Channel Car Ferry Services (Hansard, 12 December 1980)

§ Mrs. Sally Oppenheim

My right hon. Friend has decided that some relaxation of current requirements would now be appropriate.

The previous Government made a number of announcements following publication of this report in 1974, reporting the progress made by the Director General in discussions with the United Kingdom operators to ensure the effective implementation of the commission's recommendations about collective fixing of common minimum rates and pooling arrangements and also to obtain further improvements in the structure of the tariff. On 21 November 1976 the then Minister of State for Prices and Consumer Protection told the House that he 491W considered that modifications to fare structures then introduced constituted a major further step towards implementation of the report. He said that he was asking the director general to continue negotiations to secure further improvements, and said that he was willing to consider a reduction of supervision in the light of experience.

Following these continued negotiations undertakings were submitted to my right hon. Friend by Sealink (UK) Ltd, European Ferries Ltd, P & O Normandy Ferries Ltd at the end of 1979, and by British Rail Hovercraft Ltd (Seaspeed) at the beginning of this year. These undertakings took into account developments in the competitive situation since 1976, including the emergence of new or extended services on the routes concerned and the ending of the pooling agreement between Sealink and European Ferries. The director general's recommendation, which the Government accepted, was that these developments justified the cessation of the detailed control of tariff increases. My right hon. Friend agreed that this control, to which the United Kingdom operators had until then submitted, should be ended.

The undertakings therefore provided, in summary, that with regard to reference services the respective operators:

(1) would not participate in any agreement relating to rates or fares except under existing pooling agreements;
(2) except as provided under (1) would not hold any discussion with any other United Kingdom incorporated operator relating to tariffs, without arranging for a record thereof to be submitted within 30 days to the director general;
(3) would not participate in any new pooling arrangements, or extend existing ones, without the prior consent of the Secretary of State;
(4) would notify to the director general any increases or other changes in rates or fares;
(5) would provide to the director general such financial information relating to reference services as he might require to allow him to monitor the profitability of cross-Channel car ferry services.

Except for the substitution of notification of tariff changes for prior approval of tariff changes these undertakings formalised arrangements that had been agreed to by the United Kingdom operators since the previous Governments acceptance of the commission's report.

Since these undertakings were given they have been kept under review; and my right hon. Friend has now concluded, in the light of advice from the director general and against the background of the further increase in competition which has emerged this year, that it waould be appropriate to make some further relaxation in aupervision arrangementa. My right hon. Friend has therefore agreed that, in addition to the ending last year of the requirement that tariff increases should be subject to prior Government approval, the operators should also now be released from their undertakings to notify tariff changes to the director general and to provide information for profit monitoring. The effect of this change will be to free the companies from any further day-to-day control of their operations.

The four operators concerned recently sought my right hon. Friend's consent to their release from all the present undertakings and to their being permitted to engage in discussions with a view to agreeing among themselves certain minimum tariffs for the 1981 season. The Government have considered these representations carefully, but are not persuaded that circumstances justify 492W a return to tariff-fixing. My right hon. Friend has therefore decided that the operators should continue to be bound by the first three of the undertakings I have listed above.